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"Any business that takes on a foreign national without permission to work is breaking the law and faces a heavy fine and possible prosecution.”

The company is understood to gold-plates the torches after they are made by Premier Sheet Metal in Coventry.

An unnamed source at the firm told the Sun newspaper security staff for the Olympic organisers had been based there, but had not noticed the immigrants.

He said: “They count workers in and out, check how many torches are being worked on and they're all accounted for.

“What they didn't realise was there were illegal immigrants right under their noses."

A London 2012 spokesman said: "The company was not directly contracted and the issue has been dealt with by the UK Border Agency."

A member of staff at Crown Polishing and Plating in Wolverhampton, West Midlands, said the firm had not been aware of any illegal immigrants and had employed the workers through an agency.

The company had been advised not say any more for legal reasons, she added.

The discovery will add to concerns surrounding labour at the London 2012 Games, with figures published today revealing almost half of all workers legally employed to build the Olympic Park were foreign.

Around 18,400 of the 46,000 jobs were given to people from abroad, with more than a quarter of the total workforce being from the EU.

The majority of these were Eastern European, with eight per cent of workers being of Romanian nationality. Another 12 per cent were from non-EU countries.

The Olympic Delivery Authority (ODA) which pledged to employ local people to create a “skills legacy”, has admitted four in ten of the jobs had eventually been awarded legally to foreign workers.

A spokesman said 98 per cent of the contracts were awarded to British-registered companies, with the authority having no control over where firms sourced their staff.

Almost a fifth of the workers were employed from the five host boroughs of Newham, Greenwich, Tower Hamlets, Hackney and Waltham Forest, he added.

It is understood the definition of “local” in this context includes migrant workers who can provide an address in the area.

Alp Mehmet, former British diplomat and vice-chairman of the think-tank Migration Watch, told the Daily Mail: “If the ODA and its contractors have gone overseas to look for cheaper labour then that is a lamentable act.”

An ODA spokesman said: “We have met our targets to train and recruit local residents and those out of work.

“However, while the ODA has encouraged companies to employ more local residents, recruitment decisions are ultimately taken by our contractors – 98 per cent of whom are registered in the UK.”